StoneCo (NASDAQ:STNE) versus Finance of America Companies (NYSE:FOA) Financial Contrast

Finance of America Companies (NYSE:FOA) and StoneCo (NASDAQ:STNE) are both finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, risk, institutional ownership, earnings, profitability, valuation and analyst recommendations.

Analyst Ratings

This is a breakdown of current ratings and price targets for Finance of America Companies and StoneCo, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Finance of America Companies	2	1	2	0	2.00
StoneCo	0	6	4	0	2.40

Finance of America Companies presently has a consensus price target of $30.50, suggesting a potential upside of 170.87%. StoneCo has a consensus price target of $14.30, suggesting a potential upside of 18.48%. Given Finance of America Companies’ higher possible upside, analysts clearly believe Finance of America Companies is more favorable than StoneCo.

Valuation and Earnings

This table compares Finance of America Companies and StoneCo”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Finance of America Companies	$497.43 million	0.39	$45.24 million	($3.01)	-3.74
StoneCo	$13.59 billion	0.22	$425.73 million	$2.48	4.87

StoneCo has higher revenue and earnings than Finance of America Companies. Finance of America Companies is trading at a lower price-to-earnings ratio than StoneCo, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Finance of America Companies and StoneCo’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Finance of America Companies	-0.10%	28.39%	0.35%
StoneCo	22.92%	22.19%	4.10%

Volatility and Risk

Finance of America Companies has a beta of 1.68, indicating that its stock price is 68% more volatile than the S&P 500. Comparatively, StoneCo has a beta of 1.68, indicating that its stock price is 68% more volatile than the S&P 500.

Institutional and Insider Ownership

97.2% of Finance of America Companies shares are owned by institutional investors. Comparatively, 73.2% of StoneCo shares are owned by institutional investors. 35.4% of Finance of America Companies shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

StoneCo beats Finance of America Companies on 8 of the 13 factors compared between the two stocks.

About Finance of America Companies

Finance of America Companies Inc. a financial service holding company, through its subsidiaries, engages in the operation of a retirement solutions platform in the United States. It operates through two segments: Retirement Solutions and Portfolio Management. The Retirement Solutions segment engages in the loan origination activities comprising home equity conversion, proprietary reverse, and hybrid mortgage loans for senior homeowners. The Portfolio Management segment provides product development, loan securitization, loan sales, risk management, servicing oversight, and asset management services for borrowers and investors. The company was founded in 2013 and is headquartered in Plano, Texas.

About StoneCo

StoneCo Ltd. provides financial technology and software solutions to merchants and integrated partners to conduct electronic commerce across in-store, online, and mobile channels in Brazil. It distributes its solutions, principally through proprietary Stone Hubs, which offer hyper-local sales and services; and sells solutions to brick-and-mortar and digital merchants through sales team. The company served small-and-medium-sized businesses; and marketplaces, e-commerce platforms, and integrated software vendors. StoneCo Ltd. was founded in 2000 and is headquartered in George Town, the Cayman Islands.